How I Survived 16 Weeks Without Pay
Working for a small business, the situation has been dire for a while. The company is slowly clawing its way up from the depths of long past financial sinkholes that are largely unknown to me. It is worth mentioning that the company as a whole isn't 16 weeks behind for everyone - just me and "a few others." Allow me to explain. I get the impression that most people are only a few weeks behind on pay, and relative to my situation this is just as it should be. I will detail the reasons why I was able to survive for 16 weeks, and many of my peers would have not.
1.) Intermittent consulting income.
This provides a little relief on a monthly basis. I did a good amount of moonlight work for a company back in May and June, and after NET60 invoice terms, I am just now seeing the fruits of that labor in my bank account. Having a company with invoicing terms like that is as much of a curse as it is a blessing.
You simply have to account for the delay in your planning, and not getting paid for around 2 months after you complete work can be intimidating. Once you are regularly sending invoices and the cash starts flowing in, it's business as usual - with the added benefit that when you stop, the checks continue to come for a few months while you aren't doing work. So you sacrifice up front to get paid in the back.
2.) My burn rate is incredibly low.
I have largely stopped eating out, and pretty much replaced those meals where I would normally jump over to a restaurant with nonother than Nongshim Black, with a whole bunch of extra veggies diced in there.
It costs me about $1.50 a meal, and doesn't give me a weird belly ache like Maruchan or some of the other sub-50¢ brands. I have 4 roommates, which reduces my mortgage contribution out of pocket to about $250 a month. I typically end up spending about $150 on utilities per month, less when it starts to cool off. On top of that I have car insurance and a cell phone bill - which add up to around 300 a month (I have several cars as many of you know). There is plenty of room still in this burn rate to slash if I really had to! I could cancel my smartphone and get a pay-as-you-go, that would save me about $90 a month. I could sell/ deinsure several vehicles (I'm in the process of doing that now). I recently called Verizon and Cox cable, and was able to negotiate lower rates on both of those services. I even was able to get an extra gigabyte of data from Verizon, all with a price break to boot. I hardly even spend 15 minutes on hold and was able to reduce my bill by $15 a month, which equates to $180 a year! That phone call I was earning $720 per hour! Not bad at all.
3.) Flipping cars and selling parts.
In the last 4 months I have sold 2 vehicles and traded one, and I continue to have trickle income from the 1993 Z28 that I parted out back near the middle of 2016. I currently have two cars for sale that I expect to return income in the next 2-3 weeks. My original intention was to sell one of my vehicles (Rice Burner Money Turner) and tackle some looming credit card debt (gasp!) that I used to make a large software purchase for my consulting company at the end of 2016. As it turned out, I needed that money to survive without pay, so unfortunately interest has continued to accrue on that. I currently have a plan in place to destroy all of my debt from an income source other than my work. That's right, I'm going to pay it all off with side hustling, and that will be a post on its own as I take the stage to make that happen here in the next few months.
4.) I have a support stream that is incredibly dependable if I just swallow my pride.
I'll admit, there has been two occasions over the last several months that have required me to ask for a loan from my family to get me through a weekend, a set of auto-withdrawal bills that I know will be taking place, etc. I am fortunate that I have a great relationship with my family who is aware of my situation and are always there to help. Part of that is always being able to return their gracious loans in a timely manner. I think too many people don't take loans seriously, be them from a bank, a family member, or a shark. Part of being able to rely on that sort of thing is making sure that you always have a good relationship with that group that you may have to depend on when the shit hits the fan.
5.) I have reduced the activities that require me to spend money
You may have recently read that I did a home gym installation, this was strategic in that I am no longer wasting valuable time driving to and from the gym, I can avoid the cost of parking, and when I'm out and about I'm more likely to cave to the hunger after an intense workout and go eat out somewhere (see #1). When I'm home, I always have access to some kind of cheap food (bear dinner). Lifting now costs me nothing - I can sell the equipment easily for what I purchased it for, so in essence it is free, vs the recurring cost of a gym. Even the best deals in the USA are about $5 a month, and if you're at a nicer place like Platinum or LA Fitness, I would expect $20-50 depending on your area. Sure, you get amenities like lockers, saunas, pools, and other activities, but I don't want anything other than cold, hard iron, so it doesn't matter to me!
I've recently jumped into playing video games again after about an 8 year lull. I still find it quite enjoyable so long as I don't beat myself up about being productive. A good multiplayer game that my best friends are into costs little in the grand scheme of things ($20?) and provides for hours upon hours of leisure time. My buddy shared his steam library with me, and now I have access to literally hundreds of games I've never played, for free.
6.) Safety Net
Safety net is something we and pretty much any financial blogger or guru recommends that you have. We've written about it extensively and I wanted to put it here because I was in the process of building one up when regular payroll stopped. The savings that I had in this fund was able to last me about as long as I predicted it would - 6 weeks. My intention was to save up for a 6 month fund, but desperate times call for desperate measures!
There is a lot that can be done to survive in the event that you end up without pay (deferred or eliminated altogether). I have the good fortune of knowing I am building a backlog of cash with my employer (which is essentially forced savings). I will have a substantial amount of money once I am finally paid up to current, which will allow me to invest that in something that will continue to appreciate. Have any of our readers had to survive without pay for any length of time? Let us know in the comments below ways that you changed your lifestyle or methods you employed to help you through the hard time. Or pop us an email. We won't always respond, but we read each and every one!